XTC Trend Indicator

The XTC Trend Indicator is a forex trading indicator which traders could use as an additional confirmation tool. Because of its simplicity, traders like the XTC Trend Following Indicator.  To follow certain market movements, it is very simple to understand and implement. This forex trading indicator could be combined with other trend indicators such as moving averages, parabolic SAR, and so on. Instead of generating signals, this indicator can be used as a confirmation indicator.

What is the XTC Trend Indicator?

The XTC Trend Following Indicator is a simple-to-use trading indicator.  It is simply a histogram generated by complex algorithms. When the histogram of the XTC Trend Following indicator turns red (or negative), it is a sign that you could sell the currency pair. A positive histogram, on the other hand, indicates that you could buy the currency pair.

Setting up the XTC Trend Indicator
Setting up the XTC Trend Indicator

XTC Trend Strategy

The XTC Trend Strategy, as the name implies, is a trading system designed for trending markets. The trend oscillator provides buy and sell signals for any currency pair.  In a separate chart window, the indicator appears as a red and blue oscillator. The XTC Forex Trend indicator advises the traders for scalping and day trading on lower-spread currency pairs. The blue-colored histogram signals a bullish move while the red-colored histogram signals a bearish move. As a buy and sell trend confirmation tool, this indicator can be used in conjunction with any existing trading strategy or system.

Buy Signal

The following could be your checklist for a buy trade:

  • When the market is up trending.
  • When the XTC Trend Indicator forms a blue (positive) histogram.

Once these two events occur:

  • You could open a buy position after the histogram bars turn blue and you get your signal confirmation.
  • You could set your stop loss just below the nearest swing low.
  • You could set your take profit at the nearest resistance zone, or you could exit trade when the histogram bars turn red.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
XTC Trend Indicator Buy Setup
XTC Trend Indicator Buy Setup

Sell Signal

The following could be your checklist for a sell trade:

  • When the market is down trending.
  • When the XTC Trend Indicator forms a red (negative) histogram.

Once these two events occur:

  • You could open a sell position after the histogram bars turn red and you get your signal confirmation.
  • You could set your stop loss just above the nearest swing high.
  • You could set your take profit at the nearest support zone, or you could exit trade when the histogram bars turn blue.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
XTC Trend Indicator Sell Setup
XTC Trend Indicator Sell Setup

XTC Trend Pros & Cons

Pros

  • The XTC Trend Indicator can be used with any forex trading system or strategy to confirm trading entries or exits.
  • This indicator can be used by traders of all levels of experience as an added confirmation tool while utilizing its colored histogram bars.

Cons

  • The XTC Trend Indicator is more of a confirmation indicator than a signal-generating indicator.
  • This indicator may produce false signals on smaller timeframes more frequently, though larger timeframes are also prone to false signals.

Conclusion

The XTC Trend Indicator is a useful indicator which all kinds of traders, including scalpers, day/intraday traders and swing traders, can employ in their respective trading strategies. It can be used to identify the direction of the prevailing trend with the use of its color code shown by the histogram bars. The traders should not depend solely on the signals given by this indicator, but they could add it to their trend-confirmation tools.